Car buyers turning to personal loans to purchase new cars

According to research, one in five people now take out a personal loan to buy a new car. At a time when many people are looking to cut back on their spending, this statistic will surprise many. However, according to the same research, 44% of the people that are using personal loans to pay for their new cars are doing so because their current car is either old or damaged. This would suggest that these purchases are out of necessity rather than choice.

Previously these old or damaged cars would be worth very little to their owners. If the owners were looking to part exchange their current car they would be offered very little for their vehicles by car dealers. However, thanks to a newly introduced government scheme, these old or damaged cars are now worth £2,000 to their owners. The new scheme allows drivers with cars over 10 years old that they have owned for at least 12 months to scrap their car in exchange for a £2000 discount on a new car.

Half of this amount is paid for by the Government in the form of a voucher which is only redeemable against a new car purchase. The other £1000 is contributed by the manufacturer in the form of a discount on a new car purchase.

This scheme has helped revive a fairly stagnant car market. More so it has offered many the opportunity to buy a new car which without the £2000 contribution may not have been possible.

It is understandable that people are taking out personal loans to take advantage of this new Government scheme. It is possible to find the best loans online. Many price comparison sites offer online loans so why not take a look!